Using credit cards to make payment for goods or services is today a major part of our daily life. While most people prefer this mode of payment due to its convenience as opposed to using cash or cheques, using your credit card has another big advantage. That is, you are protected under section 75 refunds.
What is a section 75 refunds?
Section 75 refers to a piece of legislation under the Consumer Credit Act that was enacted in 1974. Section 75 of this act is a very important consumer protection law that covers consumers from the risk of getting into debt for goods that they never received, or goods that were faulty at the time of delivery. This implies that under section 75, while you may claim a refund form the supplier, the law holds your credit card company equally and jointly liable in a case where things go wrong in a purchase.
Conditions that must be met for one to claim section 75 refund.
Under section 75, you can make a claim for refund from your credit card company in a case where the supplier goes out of business, disappears, or fail to deliver a good or service that you had ordered. This right is also extended to consumers when the supplier delivers faulty goods or if the goods delivered do not match with the description of the goods ordered.
However, to qualify for a section 75 refund, the following conditions must be met:The good or service purchased or ordered must be worth more than £100. The value should not exceed £30,000.Some purchases are not covered by this legislation e.g. if the purchases are made via a debit cards or using charge cards. That is, where the monthly bill requires to be settled in full.
In addition, the legislation only applies to cases where the credit has been given under a pre-existing arrangement between the credit card company and the supplier.
Also, section 75 refunds does not cover credit card cheques given that they can be paid to anyone including suppliers who are not appointed to accept the credit card.
Does a section 75 refund apply to other credit?
Though most claims are lodged to credit card companies, this legislation also apply to other modes of credit agreements. The only exception to this is cases where the supplier is also the creditor.
Personal bank loans are also not covered by section 75 legislation. This is because the requirement of a Creditor -Supplier agreement is not adequately fulfilled. That is, the finance cannot be properly linked to an item as a loan may be used for a different purpose.
Important tips about section 75 refunds
Section 75 protection only covers credit cards and store cards. Note that, debit cards, cash, cheques or charge cards are not covered.If you are looking for a new card for section 75 protected purchases, the two best choices that you should consider are:Cashback credit cards-are cards that pay you every time you spend on them.0% for spending cards- these are cards that offer you a 0% interest for a year on all your credit card spending.This law also protects oversees and online purchases.Group purchases are also protected under section 75.
